A condensed income statement for Gilbert, Inc. follows: (amounts are shown in thousands) Products H Total Sales (total) 2$ 275 $ 187.5 $ 395 $ 857.5 Total Unit-level Costs (150) (161.5) (215) (526.5) Contribution Margin 125 26.0 180 331.0 Company-wide Facility-Level Costs (26.5) (31.5) (55) (113.0) Income (Loss) $ 98.5 $ (5.5) $ 125 $ 218.0 Gilbert's management is considering whether to eliminate manufacturing product G at the beginning of the next year. The elimination will have no effect on the sales or unit-level costs of products F and H. The change in income that would result from eliminating product G is Multiple Choice $31,500 increase $26,000 decrease
A condensed income statement for Gilbert, Inc. follows: (amounts are shown in thousands) Products H Total Sales (total) 2$ 275 $ 187.5 $ 395 $ 857.5 Total Unit-level Costs (150) (161.5) (215) (526.5) Contribution Margin 125 26.0 180 331.0 Company-wide Facility-Level Costs (26.5) (31.5) (55) (113.0) Income (Loss) $ 98.5 $ (5.5) $ 125 $ 218.0 Gilbert's management is considering whether to eliminate manufacturing product G at the beginning of the next year. The elimination will have no effect on the sales or unit-level costs of products F and H. The change in income that would result from eliminating product G is Multiple Choice $31,500 increase $26,000 decrease
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
3rd option: $5,500 increase
4th option: $5,500 decrease
Transcribed Image Text:A condensed income statement for Gilbert, Inc. follows: (amounts are shown in thousands)
Products
H
Total
Sales (total)
275
$ 187.5
$ 395
$ 857.5
Total Unit-level Costs
(150)
(161.5)
(215)
(526.5)
Contribution Margin
125
26.0
180
331.0
Company-wide Facility-Level Costs
(26.5)
(31.5)
(55)
(113.0)
Income (Loss)
$ 98.5
$ (5.5) $ 125
$ 218.0
Gilbert's management is considering whether to eliminate manufacturing product G at the beginning of the next year. The elimination will have no effect
on the sales or unit-level costs of products F and H. The change in income that would result from eliminating product G is
Multiple Choice
$31,500 increase
$26,000 decrease
$5.500 increase
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